U.S. set to challenge American-JetBlue partnership, WSJ reports By

(Reuters) -The U.S. Justice Department is preparing to file a lawsuit challenging American Airlines (NASDAQ:) Group Inc’s partnership with JetBlue Airways (NASDAQ:) Corp on antitrust grounds, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

The lawsuit could come as early as Tuesday, the newspaper said.

The airlines’ “Northeast Alliance” partnership was announced in July 2020 and approved by the U.S. Transportation Department six months later, shortly before the end of the Trump administration.

The codeshare agreement allows American and JetBlue to sell each other’s flights in their New York-area and Boston networks and link frequent flyer programs in a move aimed at giving them more muscle to compete with United Airlines and Delta Air Lines (NYSE:) in the U.S. Northeast.

The government is planning to allege in the lawsuit that the partnership between the two airlines could lead to higher fares and hurt competition, the newspaper reported.

American Airlines said that it has not been notified that a lawsuit was coming. It also defended the alliance with JetBlue as “providing more choices and better service for customers.”

JetBlue did not respond to a request for comment.

The lawsuit is the second action the Biden administration has taken recently to ensure competition in the skies.

The Transportation Department said last week that it planned to award 16 take-off and landing slots at Newark Liberty International Airport to a yet-to-be-determined low-cost carrier, and said it could take action to boost competition at other major airports.

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